Reference no: EM133298257

Eagle Sun is a Costa Mesa Company and has been marketing herbal teas for a long time. One of them, Mendocino Wild, is made from the bark of redwoods. It is great tasting, and one of the popular brands. Eagle Sun notices that none of their customers has ever tested positive for the Covid-19 virus, or died from it. So, they commission a report, and a Nobel Prize winner states that the tea is an effective vaccine. Eagle Sun begins to market it that way, and soon, sales triple from $3 million to $9 million. Then, two drinkers catch the virus, and one dies from it. The FDA hears, and sends Eagle Sun a letter that while the FDA does not have a rule forbidding the sale of teas as Covid vaccines, it will within a week. The FDA approves the rule in 5 days, and includes in the rule a requirement that any seller of teas have a peer reviewed report (Eagle Sun does not have that), a penalty of $10,000 a day for any violations, requires shipping records or else a $ 5,000 penalty will apply, and allows the FDA to shut down violators with a 3 day notice. 5 days after the rule is passed, the FDA inspector shows up at the door and asks for shipping and sales records, and is told they don't have good records. The FDA penalizes them $900,000 for the two months of sales, and issues a stop notice telling them to close within 3 days. They ask you for help!

1. Is the rule by the FDA valid? Why or why not? In your answer, don't discuss or worry about "emergency rules", but just stick to what we have learned.

2. Presume the FDA Administrative Law Judge approves the FDA action. Where (what court) would you first appeal the ruling to?

3. The whole case ends up at the Supreme Court. The Court sees the Nobel Prize winner report, and a staff report of the FDA that says there is no connection between the teas and Covid. How will the Supreme Court rule, and tell me something about Chevron deference in your answer.